Insights

changes to kiwisaver - keep calm and carry on
Changes to KiwiSaver – Keep Calm and Carry On
May 26, 2025 in Insights by

Old Heads on Young Shoulders

We were surprised but impressed with the benefits of the KiwiSaver scheme being extended to younger people (16 & 17yr old’s). Through our work we often meet with people that are advanced in their working life and they comment that they are glad they were pushed into saving and never since missed the money pay to pay.

Whereas younger people sometimes focus on the loss of the KiwiSaver contribution from their wages as for them retirement (or even first house purchase) seems so far away.

Going forward, from 1st July 2025, the ‘govt contribution’ will apply to those 16yrs and older, where previously the govt matching had only been for those aged 18+ (and ceasing at age 65yrs). From 1 July 2026, the employer will be required to contribute to those aged 16+ also. Hopefully this helps encourage those younger people to create a savings habit through KiwiSaver, and gives them extra reward for doing so.

This makes the scheme even better for those that enter the workforce at an early age (16yrs) as they will be able to get the same benefits as their slightly older peers, and this will significantly assist them with first home purchase.

Like a Pay Rise

Our default contribution rates to KiwiSaver are going up to 3.5% in 2026 and then 4% in 2028, and these need to be matched by the employer. Sort of like a pay rise which you don’t have to negotiate. This change will also get us slightly closer to the Australian Super Scheme to which KiwiSaver is sometimes compared.

We expect that for most employees these changes will occur automatically and that will benefit most people – BUT the government has indicated you could retain the 3% minimum contribution if you prefer, this will likely require you to complete a KiwiSaver request form (though this is yet to be released).

Less Cream

In 2007, when KiwiSaver started, we were eligible for ‘matching tax credit’ of upto $1043/yr, AND a $1,000 kickstart. This was cream, with a cherry on top . In 2012 the matching tax credit was renamed the ‘govt contribution’ and reduced to $521/yr (so less cream), and soon there will be less cream again, but it’s still good to get SOME cream!!

We highlight though, there is NO change to the govt contribution for this year – so still aim to have at least contributed $1043 prior to 30 Jun 2025.

After this time, the govt contribution is going to 25% – effective 1 July 2025 (up to $260.72). So you still need to contribute at least $1043 to get this (now lower) level of govt contribution (or cream).

Also note, those with a taxable income of more than $180,000 will no longer be eligible for the govt contribution at all, so unfortunately, you need to get your own cream.
For those interested in more detail or other aspects of the budget, please follow this link to the official site

Health Insurance Premiums
March 24, 2025 in Insights by

At AdAstra Financial Services, we recognize the challenges posed by escalating health insurance premiums. Our commitment is to provide professional advice on insurance, investment and KiwiSaver, ensuring our clients navigate these complexities effectively.

We advocate on behalf of our clients, recently engaging with the health insurance providers and current govt. representatives to highlight our concerns that health coverage could soon become a ‘luxury product’. Our goal is always to ensure that our clients receive the best possible advice and know they will be supported whether in challenging times, or prosperity.

We recently saw a recent analyses which also highlighted a significant surge in health insurance premiums in New Zealand. According to Aon’s 2025 Global Medical Trend Rates Report, New Zealand’s medical trend rate escalated from 7.4% in 2024 to a striking 14.5% in 2025, marking one of the most pronounced year-on-year increases globally.
Several factors contribute to this upward trajectory:

Post-Pandemic Healthcare Demand: The aftermath of the COVID-19 pandemic has seen a notable increase in healthcare utilisation. Many individuals deferred medical treatments during the pandemic years, leading to a backlog of procedures and consultations. As these delayed treatments are now being addressed, there’s an amplified demand for medical services, subsequently driving up costs.

General Inflation: New Zealand has experienced elevated levels of inflation across 2023 and 2024. This economic environment has directly impacted the cost of medical care, as expenses for medical supplies, equipment, and services have risen in tandem with broader inflationary trends.

Strain on Public Healthcare: The public healthcare system in New Zealand has been under considerable pressure, prompting more individuals to seek private healthcare alternatives. This shift increases demand in the private sector, contributing to higher medical costs and, consequently, rising insurance premiums.

Globally, the average medical trend rate is projected to be 10% in 2025, following a peak of 10.1% in 2024—the highest in the past decade. The Asia-Pacific region, in particular, is witnessing substantial increases, with New Zealand recording the second-highest medical trend rate in 2025, surpassed only by Kazakhstan at 22%.

Key drivers of these rising medical trend rates include increased demand for prescription and specialty medications, innovations in medical technology, geopolitical factors impacting supply chains and healthcare costs, and a heightened focus on emotional health, with stress management and wellbeing initiatives becoming priorities.

As we navigate this evolving landscape, AdAstra Financial Services remains dedicated to supporting our clients, helping them make informed decisions to protect and enrich their lives.